ARMC budget outperforming plan, so far

January 24, 2013

ALPENA - For the first six months of the fiscal year, Alpena Regional Medical Center is looking at some good financial news.

"At the conclusion of the initial six months of our fiscal year net operating revenue is less than planned, but operating expense is 4 percent less than planned. As a result, operations have provided excess revenue over expense in excess to plan," George Smart, vice president for finance and information systems said. "Based on our current year activities, non-operating revenue is outperforming plan, which enhances the total return."

The ARMC Finance/Cost Containment committee approved the November and December financial reports during its Thursday meeting. Smart presented the financial reports along with a summary of the first six months of the new fiscal year.

"For the month of November, intake and volumes met plan expectations, inpatient volumes met the mark," he said. "The big change was 20 percent employee contribution, it had a larger impact than projected in the budget. As we move forward, projected costs will be more accurate."

The committee accepted the November financial reports with operating fund disbursements of $16,209,180 with R&I disbursements of $104,949 and write-off of uncollectible patient accounts of $690,659 with recoveries of $92,059.

"We're at the half way point," he said. "However, December was a mixed bag of results."

According to Smart, December's inpatient volumes met budget expectations, inpatient rehab increased, but there were fewer surgeries and the overall average length of stay was low. Outpatient volumes also fell short of budget along with volumes in every department.

"Our concern moving forward is if volume doesn't pick up. We can control and maintain expenses, but we need to be generating revenue," he said.

The committee also accepted the December financial reports with operating fund disbursements of $9,812,395 with R&I disbursements of $174,712 and write-off of uncollectible patient accounts of $538,178 with recoveries of $91,004.

In other business, the committee will make one capital purchase recommendation to the full board during its Tuesday meeting. The committee will recommend purchasing two ESX servers for the Project Charter from IBM and VMware Software for $34,000 for MIS.